The United States has played down any prospects of war with Iran or any immediate dangers from its nuclear drive but warned that the world was ready to confront its “provocative” policies.

Iran’s test firing of a medium range missile that it said could reach Israel drew anger in Washington but US Defense Secretary Robert Gates said the United States and Iran were not close to war.

Asked if the two countries were closer to a military confrontation in light of the escalating rhetoric, Gates said, “No I don’t think so.”

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“The reality is there is a lot of signalling going on, but everybody recognizes what the consequences of any kind of a conflict would be,” he said.

“And I would tell you that this government is working hard to make sure the diplomatic and economic approach to dealing with Iran and trying to get the Iranian government to change its policy is the strategy and is the approach that continues to dominate,” said the defense chief.

Iran’s missile launch Wednesday came a day after an aide to Iranian supreme leader Ayatollah Ali Khamenei warned Tehran would “set fire” to Israel and the US navy in the Gulf in response to any American attack over its nuclear program.